Refining Community Logo

US Ref Prod – Distillates Capped Hi Supply East Rockies

Home Forums Refining Community Refinery News US Ref Prod – Distillates Capped Hi Supply East Rockies

This topic contains 0 replies, has 1 voice, and was last updated by  basil parmesan 12 years, 2 months ago.

  • Author
    Posts
  • #3119

    basil parmesan
    Participant

    <Here is Reuters update US Ref Products –  If we have production capped during the peak of Gasoline season & refineries down then this could be a record low Utilization for the year since 60% demand occurs in this time frame and lost utilization cannot be made up with low ratio’s between production & capacity.  May not be good earnings for new projects/expansions just coming online end 2008 & first 2009. Comments -C. Randall>
    ———-
    US Products Outlook : Distillates Capped High Supply East Rockies
    NEW YORK, April 20, 2009 (Reuters)An overhang of barrels likely will keep a cap on distillates prices in most cash markets east of the Rockies near-term despite possible higher agricultural demand in the Midwest, traders said Monday.
    Meanwhile, gasoline values may hold firm or rise in the New York Harbor as fewer cargoes arrive in the major import hub, traders said. But Gulf Coast and Midwest gasoline values were seen relative unchanged as supplies remain ample.
    According to the latest available government data, total U.S. inventories of distillates — which include diesel, heating oil and jet fuel — were 139.6 million barrels in the week to April 10, up sharply from 106.1 million a year ago.
    Analysts polled by Reuters on average expect the government to report a small drop of about 450,000 barrels in distillates stockpiles in the United States last week on Wednesday.
    “Bottom line, nothing has changed, the U.S. is flush with distillates,” Stephen Schork, editor of the Schork Report in Philadelphia noted in a report on Monday.
    U.S. Midwest traders said ultra-low sulfur diesel (ULSD) differentials in the Midwest were expected to remain flat to soft in the near-term despite a possible uptick in agricultural demand as increases in demand work down high inventories of the fuel in the Magellan pipeline.
    Cool, wet weather in the nation’s grain belt continues to delay corn planting, but warmer drier weather this week will improve planting conditions in some areas, especially the Midwest, according to forecaster DTN Meteorlogix.
    However, lower refinery utilization rates could rapidly change the situation and result in the long-awaited spring diesel rally in the Gulf Coast, dealers said.
    In the New York Harbor, traders said diesel differentials may hold if a dearth of sellers seen on Monday continues.
    “It should hold; it’s getting towards the end of month and are people cleaning up positions,” one Harbor trader said.
    “There’s only one ULSD offer in the Harbor so it’s holding to a strong number. It’s just Monday morning, a few (traders) are in meetings so waiting to see if more offers step out.”
    On the gasoline front, values firmed in the New York Harbor at the start of the trading week and were seen extending the rise on expectations of fewer imports as higher prices abroad make the transatlantic arbitrage window unworkable.
    Gasoline “feels stronger so far, more bids,” a Harbor trader said, adding that the strength was linked to few European import cargoes.
    In the U.S. Gulf Coast, gasoline differentials dipped slightly on Monday despite a sharp drop in benchmark prices. In the Midwest, gasoline differentials were also steady to lower.
    In both markets, differentials were expected to remain relatively unchanged despite news of a decrease in gasoline cargoes from Europe.
    “There’s lots of product to be soaked up,” said broker in the Gulf and Midwest markets.
    Government statistics showed U.S. gasoline inventories at 216.5 million barrels in the April 10 week, up marginally year-on-year, and market watchers polled by Reuters see a modest drop of about 725,000 barrels in Wednesday’s new data.
    Brief refinery row maintenance this week is not likely to provide much support.

    BP plans two days of work from Monday on fluid catalytic cracker unit electrostatic precipitators at the 417,000 barrel-per-day Texas City, Texas, refinery while Conoco starts maintenance Monday on the electrostatic precipitators of two gasoline-making FCCs at its 124,000 bpd Borger, Texas refinery.
    Also, Valero has said that it plan to start work this week on a hydrotreater unit at its 325,000 barrel-per-day Port Arthur, Texas, oil refinery. (Additional reporting by Gene Ramos)

    (Reporting by Haitham Haddadin and Rebekah Kebede, New York Energy Desk; +1 646 223 6045)

You must be logged in to reply to this topic.

Refining Community